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Sat, Jul 24, 2004 - Page 12 News List

DaimlerChrysler reaches labor deal in Germany

AP , STUTTGART, GERMANY

DaimlerChrysler reached a cost-saving deal with its German workers yesterday in return for job security guarantees, negotiators said, after contentious talks marked by a week of protests and brief work stoppages.

The deal involves 500 million euros (US$612 million) in annual labor cost savings in return for securing the jobs of more than 6,000 German workers until 2012, DaimlerChrysler chief executive Juergen Schrempp and chief worker representative Erich Klemm told reporters.

Management will also "make a contribution" to the cost savings, Schrempp said, without immediately giving details. He called the deal a `"good solution."

DaimlerChrysler had threatened to move production of its Mercedes C-Class cars away from its factory in Sindelfingen, near Stuttgart, unless workers agreed to on in labor cost cuts.

Earlier, employee representatives had offered some US$245 million in savings, mostly through giving up a pay raise. A main sticking point had been employee demands that the company guarantee jobs for longer than four or five years.

DaimlerChrysler says that the Sindelfingen workers have perks such as five minutes of accumulated paid break time per hour and higher premiums for late shifts than workers at German plants elsewhere. It has threatened to move the C-Class work to plants in Bremen, Germany, and East London, South Africa, where costs are lower -- a move that would wipe out 6,000 jobs at Sindelfingen.

Employees had been holding out for more than a guarantee the company won't move production of the Mercedes C-Class to cheaper plants in 2007. They are seeking to lock in work for the longer term.

Tens of thousands of DaimlerChrysler workers across the country have staged protests, which they had said would escalate if no agreement could be reached.

DaimlerChrysler has been pres-sing for cost cuts at the Mercedes division, an earnings mainstay for the past several years, as it comes under increasing sales pressure from a slew of new BMW models.

Other big German industrial firms have been pressing for similar concessions. Siemens AG achieved what is widely viewed as a groundbreaking deal by getting workers at phone repair facilities in northern Germany to work 40 hours rather than 35 for no additional pay.

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